Kerry Allen has been talking about self-publishing, and recently posted a response to someone who asked whether there's any money in it, or whether it's just "for play." [cough] Her answer is worth reading, but I thought I'd run some more specific numbers through it, and since she has comments turned off (for reasons she explains in the post) I'm doing it here.
True Story: Within the past 6 months, the agent of a writing friend who had multiple NY publishers interested in her debut novel negotiated up to a best offer of a $2500 advance and a 6% royalty, single-book deal. Belts have tightened so much up there, not even a “bidding war” puts an author in what could reasonably be called an advantageous position anymore.
Right. A $2500 advance and a six percent royalty. And that was what she got out of an auction.
Up until recently, I'd always heard that the standard royalty rate for paperbacks was eight to ten, presumably negotiable upward for writers with a good track record. Apparently that's changed. Within the last month I was chatting in comments with a successful writer who has more than half a dozen books in print and seems to be doing well. Within the context of our chat, they gave me a number which let me work out that they too make only six percent on their books, or at least on the one we were talking about. I was shocked to get that number out of my calculator (what? you'd have worked it out too, admit it) but it looks like that's a pretty good number now.
I have a book coming out next month. Just for fun, let's run some comparisons.
Let's say that $2500 is a nice standard advance for a first-time paperback with a big New York press these days. And let's assume that a standard mass-market paperback costs $7.99. At six percent, that's about $.48 per book. At that rate, it'll take just over 5208 sales to earn out the $2500 advance.
My book is coming out electronically, and will cost $5.95. I make 35% royalties on books sold through the publisher's site, and 25% on books sold through third-party vendors such as Fictionwise, Amazon, ARe, etc. Just to make the math a bit simpler, let's split the difference and say that I'll make 30% on all sales, since this is theoretical anyway. So I'll make about $1.79 on each sale. I don't get an advance, but in order to make that $2500, I need to sell 1397 books.
Of course, e-books sell in much smaller quantities than mass-market books. But with the tiny royalties and advances authors are making these days, e-book authors don't have to sell as many to even up the numbers -- only 27% as many sales will earn me that $2500. After that, I only have to make one sale for each of a New York published author's 3 3/4 to keep up with them on royalties.
Now, I'm with a small press and Kerry is talking about self-publishing. But New York has always been seen as having this huge advantage, money-wise. And it's still true that you're much more likely to sell 5000 copies of a New York published book than a self-published or small press book, because the NY publishers have much easier access to chain bookstores and other venues such as WalMart and supermarkets and such. (Not that my books would be in WalMart any time in the next century anyway.) I'm sure the writer I was talking to a while back is going to be making a lot more money with his writing than I am on mine for a good while yet.
But the margin is narrowing. If the standard entry-level royalty percentage from New York was 8-10% for a while, and now it's 6%, what's it going to be in another year or two or five? The standard on the e-pub side is 30-40%, with a bit less for third-party sales (because the vendors take a big cut). I just signed a contract for another story yesterday, and with my publisher, at least, the royalty percentage hasn't changed, and I haven't heard any rumors about any of the other small/electronic presses changing theirs either.
This isn't to say that we're all going to get rich while they all go broke; they do still have sales numbers on their side. And the advantage to that $2500 advance is that it doesn't have to earn out; the author gets to keep it no matter how the book sells. But again, that's a really small advance, by NY standards, and that was what came out of at least a smallish auction. What are advances going to look like in the future?
As has been obvious for the last year or two, the industry is changing. If your main interest is making a pile of money, go do something else; writing fiction is and always has been a financial crap-shoot, and there are plenty of ways of getting rich which are much surer and much less work. The odds aren't weighted quite so heavily against the smaller games as they were before, though, and it'll be interesting to see how the numbers -- and the business model -- go in the next five or ten years.